Overview of Argentina's Dairy Industry
In 2023, Argentina remains a significant contributor to the global dairy market, characterized by a highly developed and dynamic sector. The country is home to approximately 1.6 million dairy cattle, producing an impressive annual milk output of around 10.5 billion liters.
Production and Processing
The Argentine dairy processing industry is robust, with the capacity to process about 9 billion liters of milk each year. This capability underscores the country's strong infrastructure and processing facilities, which are essential for maintaining its influential position in the global market.
Cheese and Milk Powder Production
Argentina excels in cheese production, with an annual output of approximately 500,000 metric tons. Additionally, the nation produces around 150,000 metric tons of milk powder and whey annually, serving both domestic needs and international markets.
Key Enterprises and Dairy Farms
Prominent companies driving the Argentine dairy sector include La Serenísima (Mastellone Hermanos S.A.), Saputo Inc., and Williner. Notable dairy farms, such as Tambos La Unión and Estancia La Nueva, play a crucial role in supporting milk production.
Exports and Imports
Argentina exports around 3.5 billion liters of dairy products annually, including liquid milk, cheese, and milk powder. The country's significant domestic production capacity ensures self-sufficiency, reducing the need for imports and focusing on expanding export markets.
Significant Events in the Dairy Market
The Argentine dairy industry is navigating several changes and challenges. Notably, the change in Saputo Inc.'s Board of Directors might steer strategic new directions. Despite a projected 7% decline in milk output for 2024, exports are expected to increase by 50%. The completion of the EU-Mercosur trade deal is anticipated to enhance trade relations, while imports from Germany remain suspended due to a Foot-and-Mouth disease alert.
Market dynamics include Arcor's declined bid for full control of La Serenísima, with joint offers with Danone also being turned down. Mastellone, the owner of La Serenísima, foresees progress through increased exports and potential political shifts amidst economic pressures.
Outlook
Despite facing challenges such as rising production costs and climate-related disruptions, Argentina's dairy sector is poised for growth. Innovations like robotic dairy farming in Tacural, Santa Fe, indicate promising advancements. Reports from March 2025 highlight a nearly 16% increase in milk production year-on-year, with a projected annual growth rate of 6%, suggesting a strong recovery.
Economic pressures persist, with a 10% rise in milk production from January to March while milk prices lag behind inflation, posing economic challenges for producers. The Argentine Chamber of Milk Producers, Caprolecoba, is advocating for revised milk compensation in response to these issues.
Export Sector Recovery
In March 2025, Argentina's dairy export sector showed significant recovery, with the average price per tonne exported rising by 7% to USD 3,835.34. The export volume increased by 24.6% to 13,941.61 tonnes, expanding market diversification to 33 international markets.
Saputo remains a major player in Argentina's dairy market, entering in 2003 by acquiring Molfino Hermanos, including the La Paulina brand. The company leads in cheese exports and also produces butter, powdered milk, cream, casein, and whey protein. SanCor, an Argentine dairy company currently under bankruptcy protection, is actively exploring options to sustain its operations while seeking potential investors.
Despite increased milk production and favorable international prices, Argentina's dairy exports totaled 118,900 tons in the first four months of the year, marking a 6% decrease compared to the same period last year. Economic conditions, such as a stagnant exchange rate and inflation, make it challenging for export sectors to compete globally.
The Decline of Dairy Farms in Argentina
In the first five months of 2025, 90 dairy farms have closed in Argentina, highlighting a trend towards concentration in fewer but larger establishments. The Argentine dairy sector is witnessing a significant consolidation trend, with small dairy farms steadily disappearing. As of 2025, there are only 9,039 dairy farms remaining, a steep decline from 30,000 in 1988.
Argentina has shown a positive trend in dairy exports with increased average prices and market diversification in April and May. During the latter half of April 2025, Argentina's dairy market experienced a notable boost with the average export price rising to USD 3,921.67 per ton, representing a 3% increase. Export volumes surged by 22.7%, reaching 14,650.79 tons, and market destinations expanded from 23 to 30.
Argentina has seen a significant increase in milk production, recording a 12.4% rise between January and May of 2025 compared to the same period in the previous year. The Argentine milk industry exhibited strong growth in the first five months of 2025, achieving a 12.4% increase in production compared to the same timeframe last year. Breaking down the year-on-year growth, the leap from May 2024 to May 2025 stands at 5.6%, based on the National Dairy Directorate's latest report published in June.
Expectations of strong increases in Brazil and Mexico, alongside a recovery in Argentina and the US, are set to underpin a broader rebound in the Americas. The dairy sector in Argentina is marked in yellow, highlighting a mixed scenario with improved internal consumption and exports despite price lags.
Argentina's dairy sector has experienced an 11% growth. The Argentine dairy sector is witnessing a remarkable recovery characterized by increased production, favorable dollar prices, and introduction of new credit lines that are pegged to milk liters. From January to April 2025, Argentina produced 3.3 billion liters of milk, reflecting an 11% year-over-year increase — the highest rise in five years. Dairy product industrialization rose 13% during the same period, driven by better climatic conditions, the removal of dairy product export taxes in 2024, and enhanced domestic consumption.
Argentina's involvement in the International Dairy Federation and its efforts to reposition on the global dairy map. The seminar reflected on Argentina's return to the International Dairy Federation (FIL), with discussions on democratizing information for the dairy sector and repositioning Argentina on the global dairy map.
Production is recovering thanks to healthy margins. Growth may slow by the end of the year. A strong peso is undermining the country’s export competitiveness. Crucial decisions in July could shape the future of Argentina’s SanCor and Vicentin amid substantial debts and judicial proceedings.
Argentina's dairy production jumped by 19.7% in May. Argentina's dairy sector has witnessed a significant boost, with milk production rising by 19.7% in May compared to the same month last year. Key factors contributing to this surge include enhanced feeding strategies, improved animal health, and better farm management practices.
Argentinian business leaders at the IDEA Colloquium emphasize long-term policies to revitalize the national economy. Prominent Argentine business figures laid out strategies for transforming the nation's economic landscape, emphasizing the necessity for clear rules, macroeconomic stability, and a reliable institutional framework to attract productive investments and create quality jobs.
A cooperative from Córdoba, Argentina, has successfully exported 800 kg of specialty 'dulce de leche' to India. This venture represents a strategic pilot shipment supported by institutional backing, aiming to tap into India's growing demand for gourmet flavors. The initiative showcases the potential of Córdoba's cooperatives to innovate and expand across borders, transforming raw dairy products into premium gourmet goods.
Modified: 2025/05/18